NOTE 2 – LEASES

Lessee

The following table reflects the Company’s components of lease expenses for the three months ended March 31, 2020 and 2019 (in millions):


		Three Months Ended March 31,
	Classification	2020		2019
Operating lease cost
Revenue equipment	Operations and maintenance	$	6.4	$	5.8
Real estate	Administrative expense		3.8		4.2
Total operating lease cost		$	10.2	$	10.0

Finance lease cost
Amortization of right-of-use assets	Depreciation and amortization	$	1.5	$	1.3
Interest on lease liabilities	Interest expense		0.3		0.2
Total finance lease cost		$	1.8	$	1.5

Total lease cost(a)		$	12.0	$	11.5

(a)

Short-term lease expense and variable lease expense are immaterial.

The Company follows ASC 360, “Impairment or Disposal of Long-Lived Assets” guidance to determine whether right-of-use assets relating to operating and finance leases are impaired. The Company recorded impairment charges of $3.2 million to right-of-use assets relating to operating leases for the three months ended March 31, 2020 in connection with the planned divestiture of Aveda Transportation and Energy Services Inc. (Aveda). See Note 3 for details. There was no impairment charge to right-of-use assets relating to operating leases for the three months ended March 31, 2019.

The components of assets and liabilities for operating and finance leases are as follows as of March 31, 2020 and December 31, 2019 (in millions):


		March 31,		December 31,
	Classification	2020		2019
Assets
Capitalized operating lease right-of-use assets	Right-of-use assets	$	108.5	$	95.9
Finance lease right-of-use assets	Other long-term assets		25.3		25.3
Total lease assets		$	133.8	$	121.2

Liabilities
Capitalized operating lease liabilities:
Current	Other current liabilities	$	27.8	$	27.3
Non-current	Other long-term liabilities		91.0		77.8
Total capitalized operating lease liabilities		$	118.8		105.1

Finance lease liabilities:
Current	Current portion of long-term debt	$	6.3		6.2
Non-current	Long-term debt, net of current portion		19.7		19.3
Total finance lease liabilities		$	26.0		25.5

Total lease liabilities		$	144.8	$	130.6

The following table is a summary of supplemental cash flows related to leases for the three months ended March 31, 2020 and 2019 (in millions):



	Three Months Ended March 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from capitalized operating leases	$	(9.3)	$	(8.0)
Operating cash flows from finance leases		(0.3)		(0.2)
Financing cash flows from finance leases		(1.7)		(1.5)
Right-of-use assets obtained in exchange for lease obligations:
Capitalized operating lease right-of-use assets	$	19.1	$	8.1
Finance lease right-of-use assets		1.7		4.8

The following table is the future payments on leases as of March 31, 2020 (in millions):


	Capitalized
	Operating		Finance
Year ending December 31,	leases		leases		Total
2020(1)	$	25.7	$	5.8	$	31.5
2021		29.7		7.4		37.1
2022		26.3		5.5		31.8
2023		20.5		6.0		26.5
2024		11.1		3.4		14.5
2025		8.0		1.0		9.0
Thereafter		14.8		—		14.8
Total lease payments		136.1		29.1		165.2
Less: interest		(17.3)		(3.1)		(20.4)
Present value of lease liabilities	$	118.8	$	26.0	$	144.8

(1)

Nine months ending December 31, 2020

The following table is a summary of weighted average lease terms and discount rates for leases as of March 31, 2020 and December 31, 2019:


	March 31,			December 31,
	2020			2019
Weighted-average remaining lease term (years)
Capitalized operating leases		5.14			5.01
Finance leases		3.76			3.83
Weighted-average discount rate
Capitalized operating leases		5.36	%		5.54	%
Finance leases		4.48	%		4.51	%

Lessor

The following table is the future minimum receipts on leases as of March 31, 2020 (in millions):


Twelve months ending March 31,	Amount
2021	$	24.6
2022		18.4
2023		10.9
2024		5.7
2025		2.4
Thereafter		0.7
Total minimum lease receipts	$	62.7